June 11, 2009
Gov. Nixon announces targeted tax cut for more than 16,000 small businesses
Joined by local legislators and Karen Mitchell, director of the Missouri Department of Revenue, Gov. Jay Nixon tours McArthur’s Bakery, a small business in South St. Louis County, on June 11, 2009. Gov. Nixon toured McArthur’s to detail and sign a targeted tax cut for small businesses across Missouri. This targeted tax cut was a key provision in House Bill 191, the bipartisan jobs bill that passed this session. Under the new law, more than 16,000 small businesses around Missouri will receive a tax cut next year.
KIRKSVILLE, Mo. - Gov. Jay Nixon today visited Kelly's Furniture in Kirksville to detail legislation that provides a targeted tax cut for Missouri's small businesses.
During his stop at Kelly's, Gov. Nixon met with employees, toured the growing facility and highlighted the importance of helping small businesses create jobs during these difficult economic times. Gov. Nixon also discussed a key provision in House Bill 191, the bipartisan jobs bill, that eliminates the franchise tax for more than 16,500 Missouri small businesses, or 82 percent of all businesses that owed or paid this tax last year. Gov. Nixon signed HB 191 last week.
"Small businesses are the backbone of Missouri's economy, and they'll have more to do with our economic recovery than any Wall Street CEO ever will," Gov. Nixon said. "To jumpstart our economy and get it moving forward again, it's vital that we eliminate unnecessary burdens on small businesses to help them grow and create jobs. By ending the franchise tax for most of Missouri's small businesses, we're helping entrepreneurs keep more of their hard-earned money, while also slashing bureaucratic red tape. This is a key step in the right direction for Missouri's small businesses."
During fiscal year 2008, approximately 20,100 corporations owed and/or paid Missouri's franchise tax. Under the old law, corporations were required to pay the franchise tax if their assets in Missouri amounted to $1 million or more. The franchise tax due was calculated by calculating the franchise tax rate, 1/30 of 1 percent, by the corporation's taxable asset base.
The new law raises the asset threshold to $10 million, completely eliminating the franchise tax for 16,558 businesses, or 82 percent of the businesses that previously were liable to pay the tax.
The Missouri Department of Revenue estimates that the elimination of the franchise tax will help these businesses keep a total of approximately $14.5 million they otherwise would have paid to the state.
In addition, the bill fulfills three major components of Gov. Nixon's Show-Me Jobs Initiative, a bipartisan plan to create jobs and get Missourians back to work. Launched during Gov. Nixon's transition into office, the Show-Me Jobs plan called for the expansion of three successful state programs, the Quality Jobs Program, the Missouri BUILD Program and the Job Training Program. HB 191 accomplished each of these goals:
- The bill increases the annual cap on the Quality Jobs Program from $60 million to $80 million and removes the annual per-company cap for jobs in the high-impact and technology categories;
- The bill increases the annual cap on the Missouri BUILD (Business Use Incentives for Large-Scale Development) from $15 million to $25 million and removes the provision requiring the company to seek a competitive bid from another state; and
- The bill provides funding for pre-employment training activities under the state's Job-Training Program.
The jobs bill received overwhelming, bipartisan support in both chambers of the General Assembly. The Senate passed the bill 28-to-6, and the House vote was 153-to-2.